Activision Blizzard: A Restructured Explanation

image: Activision Blizzard

In a move that we knew was coming for a few days now, Activision Blizzard have laid off a small portion of their staffing unit – however, is this move going to affect the games which the company produces or will it be a move that makes people assume that they are being greedy? I will try to be as impartial as possible as I look to break down this move from the company.

First and foremost, this situation needs to be handled with great care. No matter the case, everyone affected by this will be having a tough time as lay offs will never be a great experience. We here at VPEsports wishes all the employees the best of luck and hope that things turn around quickly and suitably.

That said, lets get into the nitty-gritty side of things:

The company have explained this move to lay off a portion of their staff as a “restructure” from within. So taking it from that stand-point, it can become even more confusing to understand. The numbers, the hundreds and thousands of numbers, do not make an inkling of sense to someone like me – but I feel that I understand the basic idea behind their choices and hopefully this explains it.

How many?

The exact number of employees that have been cut in this ‘restructure’ has not yet been confirmed but it was seen in the earnings report that a total of 8% would find themselves being laid off. These people are obviously not just sent packing from their job and are given severance packages. Alongside this, many employees are apparently given the choice to move within the company, if other departments may “buy them out”. However, I do not care to venture a guess as to how many of the employees may get this option.

What we must not fail to see here is that the vast majority of those cut in this restructure do not come from Blizzard’s game development squads. While this is, according to Wowhead, the most attention that has been seen on layoffs within Blizzard in 7 years, it must be noted that both times it was mainly focused on non-developmental teams within the company. This means that most of the people facing these cuts come from aspects such as customer services or community management as well as possibly the esport side of Heroes of the Storm etc. More on this below.

How much?

Blizzard also released their Q4 Financial Report along with this – and it really is not as bad as one would think (although this coming from someone with no background in understanding all the numbers). It can clearly be seen that Blizzard’s quarter 4 from 2018 really did not make as much growth for the company as they would have liked – this can be chalked up to poor PR when it came to the likes of Diablo Immortal or a million other factors.

That all said, Blizzard still made a profit and, while their stock prices plummeted for a brief period, the company seemed nearly untouchable. Bobby Kotick, Chief Executive Officer of Activision Blizzard had the following to say,

While our financial results for 2018 were the best in our history, we didn’t realize our full potential. To help us reach our full potential, we have made a number of important leadership changes. These changes should enable us to achieve the many opportunities our industry affords us, especially with our powerful owned franchises, our strong commercial capabilities, our direct digital connections to hundreds of millions of players, and our extraordinarily talented employees.”

How are we affected?

I think the most confusing part of everything comes down to those questioning what is to become of any and everything Blizzard related. Once again, I must say that from my position, this move is one of building rather than breaking. Yes, Blizzard may have made some unforeseen errors in the latter parts of 2018, but it can clearly be seen that the company are still flourishing.

As I scroll down into the ‘Selected Business Highlights’ of the companies 2018 q4 Financial Report, I find myself quite taken aback by just how strong the company continued to be as 2018 closed out. However, even though it can be seen that Call of Duty has performed well, it is inherently obvious that Blackout (the Battle Royale mode of the game) has not touched on the likes of PUBG, Fortnite or the hugely popular Apex Legends.

The so called “restructuring” spoken of makes me see that the organization is trying to adapt especially with so many fast-moving companies coming up quickly and planting their foot in the market. This means more staff will focus on Warcraft-related games etc but unfortunately for things that fell away such as Heroes of the Storm esports, there will probably be no looking back.

In 2019, the company will increase development investment in its biggest franchises, enabling teams to accelerate the pace and quality of content for their communities and supporting a number of new product initiatives. The number of developers working on Call of Duty, Candy Crush, Overwatch, Warcraft®, Hearthstone and Diablo® in aggregate will increase approximately 20% over the course of 2019. The company will fund this greater investment by de-prioritizing initiatives that are not meeting expectations and reducing certain non-development and administrative-related costs across the business.”

At the end of the day, Activision Blizzard remain a business and one that is doing well – while, as stated earlier, lay-offs may be a part of restructuring and moving forward, they are horrible. Let’s hope that both those who have found themselves cut and the organization themselves can move forward and land on their feet.